INDICATOR INSIGHTS
Monthly Updates
CATEGORY
Market Sentiment/Risk MO. END % CHANGE LEVEL
Fear & Greed Index (Market sentiment) 66 +17 Greed
VIX (S&P 500 Volatility measure) 13.5 -8.4 Neutral and declining
MMRI (Risk measured by interest rates) 275 -9 Decline but high risk
U.S. 10yr-bond yield 4.18 -21 Slightly bullish
Fear & Greed Bitcoin 81 +9 Extreme Greed
CSI (Consumer Sentiment) Even No change Neutral
U.S. Economy UP/DOWN LEVEL
LEI (Overall leading indicators) Down Bearish
GDP (Gross Domestic Product) In-line Neutral
ISM/PMI (Producers Manufacturing Index) Down Bearish
CPI (Consumer Price Index) Up slightly Bearish
(Minus Food & Energy) In-line Neutral
JOLTS (Unemployment categories) Down slightly Neutral
ADP (Jobs – non-farm payroll added) In-line Neutral
(Initial and continued claims) Up Bearish
Transports (Shipping, durable goods orders) Down Bearish LTE
Real Estate (Housing starts) Even Neutral
(Total Construction Public/Private) Down Bearish
Mortgage demand Down Bearish
Personal Consumption/Retail Spending Even Neutral
Business Activity Down Bearish
*This section updated on November 30, 2024
**LTE = Lower than expected (bearish) / HTE = Higher than expected (bullish)
***We may not present the most recent numbers (often revised, and unreported in the mainstream media). Actual figures and charts can be found on the internet, including the FRED (Federal Reserve Economic Data) website.
Price Action UP/DOWN LEVEL
RSI (Relative Price Strength) Up Bullish
PCR (Put to Call Ratio – 5 day avg) Down slightly Bullish
ADL (Advance/Decline line) Up Bullish
MFI (Money Flow Index) Up Bullish
Institutional Trading Selling Bearish
Commodities MO. END % CHANGE LEVEL
Gold to Silver Ratio 86.8 + 3 Slight silver bias
Crude Oil 68.15 -1.30 Neutral
As introduced in Chapter 3 of our publication When to Buy and When to Sell: Combining Easy Indicators, Charts, and Financial Astrology (available on Amazon), there are several “leading indicators” that go largely unnoticed and under-utilized by the average beginner or intermediate investor. Some of these indicators measure human emotion and market sentiment that often determines shorter term price action, while others uncover the true conditions of the economy, institutional buying and selling, and risk levels.
In our monthly “Indicator Insights” blog (first weekend of each month) we report the previous month-end levels (pertaining to the U.S. economy and/or the S&P 500) regarding several of these easy-to-read gauges we discuss, as well as others, to provide a quick-guide for our readers, with periodic analysis when necessary. Our monthly updates in this blog section include several market psychology related gauges, including the S&P 500 Fear & Greed index updated level, although there will be no commentary, as we dedicate an entire separate weekly blog to that indicator.
In this edition we note that many U.S. economic indicators we track have leveled off to neutral, though several continue to remain bearish. Economic reports have suggested improved conditions in categories including housing starts, jobless claims, GDP, and personal/retail spending this month, however, the holiday season often results in inflated numbers. Just this weekend, the Black Friday online sales results were reported as a record $10.8 billion, amid a record number of households struggling to pay the bills, mortgage applications reducing, ultra-high credit card balances, and property defaults. Those who can still afford to high-end shop skew the numbers, which are purposely combined to mask the reality of those who are most affected by rising prices. Holiday shopping will inevitably raise this index as families will need to provide some type of gift giving. As we have repeatedly mentioned in the past, some of these reports are often revised downward, so don’t be surprised if that is the case once again.
The first of two “readings of note” this month includes a bit of divergence in the Market Price Action category, as many are now bullish despite Institutional trading remaining bearish. Should this continue, we may be experiencing a major bull trap as retail investors jump in just prior to a major correction. This normally takes some time to develop, but beware…
The second is the surge in everything Crypto. The Bitcoin Fear & Greed Index sits at 81, at the Extreme Greed level, as we prepare this article, slightly down from a day or two ago, but much higher than 2 months ago. The president-elect jump started a major rally in this space, with his promise of favorable regulations and usage within the U.S. The positive sentiment has pushed Bitcoin, and many altcoins to All-Time Highs, and there may be no end in sight. Be very careful when venturing into this industry, as it is extremely volatile, and coins/tokens routinely lose 80-90% of their “value” after large “pumps.”
As mentioned during the past few months, the equities markets remain disjointed from the economy. The markets continue to be propped-up artificially, between signs of the government buying its own debt, military conflict spending, and interest rate/bond manipulation. Although the wild daily price swings calmed for a while for the most part, market volatility will likely continue for the foreseeable future. Traders should always be attentive to indicators like ATR and volume, as tight stop losses may be prematurely triggered with these temporary spikes or declines in price. Keep some cash ready to take advantage of lower asset prices in the future, in the event “panic” sets in due to uncertain global conditions.
